Legislative Newsletter
February 5, 2010

"To Fee or Not to Fee?"

With the calendar hitting February and the deadline for closing a $4 plus billion hole in Virginia's budget looming like the Sword of Damocles, anxious lawmakers continued much of their budget discussions behind closed doors. According to this article in the Richmond Times Dispatch, Senate budget writers are exploring a proposal that would trim an additional $720 million from public schools, $480 million from health and human services, including $169 million cut to Medicaid payments, and $150 million from higher education. One underlying source of tension amongst Senate Democrats is Governor Kaine's proposal to eliminate the state's $950 million car tax reimbursement program to local governments. Senator Ed Houck (D-Spotsylvania) recently suggested that the car tax relief program should be eliminated in order to stave off what he described as the dismantling of basic government services. Without this state reimbursement, local governments would be forced to raise taxes to make up for lost revenues. The chair of the Senate Finance Committee, Charles Colgan (R-Prince William), has indicated that he will not support Houck's proposal. In a hostile, 97-0 vote designed to send a message to their Senate colleagues, the House buried a proposal to end car tax relief earlier in the session.

Another interesting question being mulled over by many lawmakers this week:

Is fee increase tantamount to a tax increase?

According to the fiscally conservative advocacy group, Americans for Prosperity, the answer is an emphatic "Yes." Over the last few days, lawmakers have received several communiqués from the group urging them to resist fee increases. However, the elimination of all of the fee increases contained in budget blueprint submitted by Governor Kaine would require budget writers to find an additional $146 million. Kaine proposed raising fees for services such as boiler inspections and accessing vital records as well as a 2% percent increase in liquor prices.  So far, Governor McDonnell has been rather opaque on this question, leaving plenty of wiggle room should he find some palatable fee increases. Other Republican House members have hinted that some fee increases would be acceptable if the increases have a close nexus with the particular service rendered.

Unemployment Insurance

A bill (HB647) that would permanently expand the number of individuals who qualify for unemployment compensation in exchange for an additional $125 million in stimulus funds was nixed by a House subcommittee on Thursday. Similar legislation will likely pass the Senate but will be routed through the same House subcommittee that tabled HB647.

VA West remains opposed to permanently expanding eligibility criteria for a short term benefit.

Other Notable Legislation

Offshore Drilling

Earlier this week, the Senate Finance Committee amended legislation introduced by Senator Frank Wagner that would allow the Commonwealth to collect revenues and royalties from offshore natural gas and oil drilling. In the original version of Wagner's bill, most of these funds would have been directed to the state's  Transportation Trust Fund. On a motion by Senate Majority Leader Dick Saslaw, the committee approved a substitute that would instead direct funds to the Commonwealth's General Fund. A House version of this bill (HB756) carried by Delegate Chris Stolle (R-Virginia Beach) allocates any future revenue and royalties to the following:

Transportation Trust Fund - 70%

Virginia Coastal Energy Consortium - 20%

Localities to improve infrastructure and transportation - 10%

There are several issues that must be resolved before any offshore drilling revenue will flow to Virginia. The Interior Department is currently considering a delay in the leasing process for the waters off the southeastern coast of Virginia to complete an environmental assessment. There also remains a lot of uncertainty as to how much oil or gas exists in these offshore reserves. Furthermore, the federal government would have to agree to a revenue-sharing provision if Virginia is to receive any future benefits from tapping offshore resources.

   Transportation Funding Bill Advances
Delegate Danny Marshall (R-Danville) successfully navigated HB540 through the House Transportation Committee on Tuesday. Similar to legislation introduced in 2009 that ultimately died in the Senate, Marshall's bill would capture 30% of any future growth generated or facilitated by the Elliston Intermodal Facility up to $50 million in any fiscal year. These funds would be directed to the Salem Transportation District with the requirement that 50% of these funds be dedicated to construction and maintenance of I-73. The remaining 50%  would be divided between construction and maintenance of I-81 in the Salem Transportation District and the Bristol Transportation District. Although a special session on transportation may occur later this year, prospects for a sustainable, statewide plan to fund transportation remain murky at best. In this political environment, any creative ideas that would direct funding for much needed construction projects in the Salem District are welcome.

Health Care

By a 23-17 vote earlier this week, the  Senate approved legislation introduced by Senators Frederick Qualye (R-Suffolk), Stephen Martin (R-Chesterfield), and Jill Vogel (R-Fauquier) that says Virginia residents shall not be forced to purchase health insurance. Although the Democrats enjoy a 22-18 margin in the Senate, the Republicans were able to peel away five Democrats in support of this measure. Similar legislation has been introduced in 30 states and is based on a model formulated by the American Legislative Exchange Council. Quayle and other backers of this legislation insist that the federal government is overstepping its authority by mandating that individuals purchase health insurance. Opponents of this legislation continue to insist that the entire debate is mere window dressing because ultimately federal law would preempt any such declaration by the states.  On the House side, HB10 was approved by the House Commerce and Labor Committee and will head to a vote by the full House next week.

Autism Mandate

In other health care news, a considerably diluted bill that would have added autism coverage to the state list of insurance mandates was left to die in a House Commerce and Labor subcommittee. The Committee deadlocked on the bill 4-4 which prevented the bill from consideration by the full committee. In an effort to broaden its appeal, HB303 would have only mandated coverage for children between the ages of 2-6 and had an annual cap of $35, 000.00. The mandate also would not have applied to the state's employees' health insurance plan until July 1, 2015. The Senate version (SB464) has not yet been considered by the Senate Commerce and Labor Committee.  VA West opposes additional mandates.

    Stormwater Regulations

Following a similar compromise brokered in the Senate a week ago, a House subcommittee recommended reporting  legislation that would extend the effective date of new state stormwater regulations until new a TMDL (Total Maximum Daily Load) plan currently being crafted by the EPA is completed. The EPA is expected to finish their work in December 2010. The compromise language requires that state regulations be delayed for 280 days after the EPA finishes its work but no later than December 1, 2011. 

Important Session Dates 

February 16th - Crossover

March 13th - Adjourn Sine Die

Video

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